Australia has recorded a slight improvement in its retirement savings position over the past year, but has fallen one spot to number three in global rankings.
The latest Melbourne Mercer Global Pension Index value, compiled together with the Australian Centre for Financial Studies, reports that Australia’s index score rose from 75 last year to 75.7 this year.
The small gain in Australia’s position was a result of an increase in the level of pension fund assets and a rise in the labour force participation rate amongst those aged 55-64.
During the past 12 months, the Australian government also successfully introduced reforms to lift mandatory Superannuation Guarantee contributions from 9% to 12 % from July 2013.
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“This reform to Australia’s superannuation system will make a significant impact on the future results and edge the country closer to top spot”, said Mercer Senior Partner Dr Knox.
“Many of the world’s retirement systems are under increasing stress with an ageing population, low investment returns and, in some cases, significant government debt. Reform is needed to ensure that adequate benefits are provided over the long term in a sustainable manner,” Dr Knox added.
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Denmark topped the Global Pension Index with an overall score of 82.9 and became the first country to be classified as ‘A’ grade. The Netherlands dropped to second position this year with a score of 78.9.
"Denmark’s unique ‘A’ grade ranking has been awarded in recognition of the country’s well funded pension system, its high level of assets and contributions, the provision of adequate benefits and a private pension system with well developed regulations," Dr Knox said.
Global leaders in retirement savings
1. Denmark 82.9
2. Netherlands 78.9
3. Australia 75.7
4. Sweden 73.4
5. Switzerland 73.3
6. Canada 69.2
7. UK 64.8
8. Chile 63.3
9. USA 59.0
10. Poland 58.2
(Source: Melbourne Mercer Global Pension Index)
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